Handbook of Blockchain,Digital Finance, and Inclusion, Volumes 1 and 2

Financial inclusion and impact investment are not viewed as main stream activities. Recent exodus of senior bankers and financial practitioners to inclusive FinTech companies has changed that perception somewhat. But perhaps it is still not enough to influence the stakeholders in the incumbents due to the lack of understanding of what these companies do, or a lack of good cases that demonstrate a good Returns on Investment (ROI). Increased awareness of “good” disruptive opportu nities in digital banking and Internet finance is important for policy makers and investors alike, so that regulation and investment are appropriately aligned to ensure sustainable world growth. Many are beginning to view the sustainability and success of both digital banking and Internet finance businesses as closely linked to the degree of financial inclusion and impact investing. Those at the lower end of the wealth pyramid almost always pay higher charges for services, especially financial services. However, businesses are prevented to take advantage of the higher rates because costs remain high to meet the diverse demand at the bottom. This is so until the emergence of FinTech. FinTech has the advantage of lowering cost and being an enabler for new and profitable business models. More recently, Blockchain, a technology that originated from cryptocurrency, is seen as an innovation that may propel financial inclusion to new heights. Blockchain has known to lower business costs, but more importantly, it has the potential to change the way business is conducted. It gives rise to new governance structure and how governance is being executed. It enables transparency in digital business models and may help to generate sustainable new revenue streams.